Washington, D.C. – Congressman Dave Loebsack (IA-02), who served as the Senior Democrat on the Health, Employment, Labor, and Pension (HELP) Subcommittee of the House Education and Workforce Committee, today delivered the following opening remarks at the hearing entitled “Providing Access to Affordable, Flexible Health Plans Through Self-Insurance.”
Loebsack’s opening statement, as prepared for delivery, is below.
“Good morning. I want to thank Chairman Roe for calling today’s hearing and thank all of the witnesses for testifying.
“The Affordable Care Act paves the way for all Americans to have access to quality, affordable health care coverage for the first time.
“While it is unacceptable that technical problems prevented people from signing up for the marketplaces at the outset, there is more than a month of open enrollment left and millions of Americans are signing up for coverage.
“As of last month, approximately 4 million people have enrolled in a marketplace plan and millions more have secured coverage through Medicaid.
“The ACA is also helping strengthen employer-sponsored coverage for the more than 150 million workers and their families who get their health insurance through employment.
“Of the workers who get coverage through their jobs, about three in five work for an employer who self-funds their coverage, which means that they directly assume responsibility for covering the cost of their employees’ medical care.
“While the ACA provides employers who self-fund with greater flexibility, it also ensures that workers with this coverage have access to many of the law’s important new consumer protections.
“Because of the Affordable Care Act’s ban on annual and lifetime limits, workers no longer face financial ruin if they confront a chronic or catastrophic illness.
“Children can stay on their parent’s plan until they are 26, including 5,400 young people in my district alone. This means that rather than worrying about whether they can afford adequate coverage at the very early stages of their careers, we are giving America’s young people a chance to focus on building a strong future right from the start.
“Now workers have the right to appeal a benefit denial to an independent third party and they have the right to a summary of their benefits and coverage to help them compare costs and understand their health care plan.
“The Affordable Care Act also provides workers with greater freedom as they are no longer tied to their employer for their health care coverage. This newfound freedom gives workers greater flexibility in the labor market: they are free to make career decisions, such as changing jobs or starting their own business, without worrying about how they will continue to get health insurance.
“Employers are also benefiting from the law and saving money through such provisions as the small business tax credit and medical loss ratio. In fact, last year health care costs grew at the slowest rate in 50 years.
“Spending less on health care allows employers to create more jobs. Since the law’s enactment, more than eight million new jobs have been added to the economy—and nine out of 10 of those jobs are full-time positions.
“Recent reports have indicated that more employers may be looking to self-insure.
“As part of today’s hearing, I expect we will discuss the issues unique to the self-insurance market. I think this is an important conversation.
“While there are many benefits to employers who self-insure, there also can be significant financial risk.
“The recent story about AOL exemplifies the risks involved with self-insuring and re-enforces why employers must be adequately prepared if they face higher than expected health care costs.
“The CEO of AOL recently blamed the high health care costs incurred by two babies for the company’s decision to cut contributions to its retirement plan.
“With 5,000 workers, AOL is not what I would consider a small employer and thus was ultimately able to absorb the costs. They did not have to shift the costs onto employees, and, after a public outcry, they backpedaled their plan to cut retirement benefits. A smaller employer—regardless of whether they had stop-loss coverage—may not have as much flexibility to absorb unexpected costs in a self-funded plan.
“I hope today’s conversation will be a constructive one and look forward to the testimony. Thank you very much, Mr. Chairman. I yield back.”